The Mathematics of Money

Copyright © 2008, The McGraw-Hill Companies, Inc.

A. Promissory Notes

For each of the following promissory notes or situations, identify the loan’s (a) date, (b) face value, (c) maturity date,

(d) maturity value, and (e) term.

1. Tim borrowed $12,000 on January 17, 2004. He signed a note, agreeing to repay a total of $12,800 three months
   later, on April 17, 2004.


2. The Keuka Park Federal Credit Union loaned Sandy $500 on April 1, 2006. She agreed to repay a total of $510 thirty
   days later, on May 1, 2006.

3.

I, Jerry Wang, acknowledge a loan of $5,350 made to me by

Lisa Bryer on July 1, 2006. I agree to repay this loan together

with $150 in interest in ninety days, on September 29, 2006.

4.

Hottenkold Indoor Comfort Company hereby acknowledges a

loan of $75,000 made on January 1, 2006, and to satisfy

this debt agrees to repay the Third National Bank of

Branchport $80,000 on January 1, 2007.

B. Finding Terms within a Calendar Year

5. Rarefi ed Air Flight Schools signed a promissory note on June 11, 2005, with a maturity date of November 30, 2005.
   Find the term of the note.


6. Christopher loaned his friend Evan $750 on March 17, 2006. Evan signed a note, agreeing to pay the loan back (with
   interest) on December 31, 2006. Find the term of the note.


7. On September 3, 2006 a promissory note that Gilles had signed on February 12 of the same year came due. Find the
   term of the note.

EXERCISES 1.4

57 days

10/14/01 1/1/02 2/26/03

78 days 365 days

2001 2002 2003

1/1/03

78 days

0 days

So we can conclude that the note was signed on October 14, 2001.

Copyright © 2008, The McGraw-Hill Companies, Inc.

Exercises 1.4 39